Mintzberg on America’s Management Failures

Henry Mintzberg is the authority that I most respect on the subject of strategy. He has written both the best textbook and the most thoughtful critiques of current practices of strategy and strategic planning I know. The easiest way to get a feel for his perspective is Strategy Bites Back.

So I pay attention when he speaks. And he had lots to say in his piece in the Globe and Mail recently here entitled, “America’s Monumental Failure of Management” which I found thanks to a post by Richard Florida. Read more

Car Makers Should Go Intangible

A recent article in my local paper on the challenges facing our town’s only auto dealership recounted the story of Bonnell Ford, a dealership founded in 1925 and still owned by the same family. I always knew that their first building was on Main Street in a small storefront. In those days, the dealership displayed a few samples and took orders for individual cars. According to the article, the days of the huge lot of cars were kicked off when foreign manufacturers, especially the Japanese, entered the market.

The Japanese had a much longer lead time to ship cars and needed to find a way to compete with Detroit’s faster turn around. So they started inventorying cars and offering the opportunity for consumers to drive off the lot in a new car. Domestic dealers had to follow suit. Bonnell moved to a big lot on the edge of town.

This strategy is part of the problem in today’s downturn. The manufacturers and dealers are left with a huge investment in inventory that isn’t moving. The large lots are obviously not the root of today’s problems but it makes you think. The time may be ripe for a shift back to small lots. Using technology, automotive dealers could create an incredible experience on site where consumers could learn about their options in the way they would on the internet but also see and touch a real example of the car that interests them–a larger version of an Apple store.

Leaders in this space could tout the lower costs and smaller footprint of their operations. It’s a strategy built on intangibles–technology, networks, personal connection. It is a way to free dealers from a high-cost operating model and pull the manufacturers into a new era.